Critical illness cover when returning to full time education

beam_me_up787

Hi everyone 

I need some advice please.

I'm in full time employment in a decently paid job that I've been in 10+ years but have decided on a career change. In Sept 2022, I will be starting a three year undergraduate degree mainly paid for by a training grant under the NHS Learning Support Fund.

I have a 7 year old critical illness policy I took out with Aviva when I bought my flat, part of which was a lump sum which I claimed 18 months ago after a period of serious I'll health. My question relates to the other half of the policy which is income protection, specifically what would be the sensible thing to do given my impending change of circumstances. Do I simply cancel say at the end of August prior to starting my degree? I am currently paying a premium of £50pm.

Any advice would be gratefully received.
Many thanks,

Weighty1

Depending on the condition for which you claimed previously it could be INCREDIBLY difficult to arrange new critical illness and/or income protection cover in the future. 

Whilst it is likely to be highly unlikely you'd be able to claim on the income protection whilst in full time education (there are certain circumstances were this may be possible) it's the fact you could be uninsurable in the future which is the issue which needs covering here.

What's the better outcome for yourself, saving £50/month whilst at university and potentially finding yourself uninsurable in the future OR spending £50/month whilst at uni but at least knowing the terms of the cover you have in force cannot be changed?

If it was me, I'd prefer the latter but that's me and you are you.  I certainly wouldn't cancel the plan in haste though.

theoretica

For three years will you have any income to protect?  What circumstances would trigger the policy to pay out?  Would your illness stop you taking out another policy in future?

beam_me_up787

Thank you for the speedy replies. All very good questions, some I don't know the answers too!.

I've been in remission from a type of blood cancer for 18 months and, whilst I wouldn't be earning an income during the degree I would be planning to go into full time employment in Sept 2025. I know income protection at 75% of my current salary would kick in if I were to relapse (that's already been confirmed with Aviva). The starting salary on completion of the degree is a fair few £K's lower than what I'm on now albeit with potential to move up quickly. I can see how getting a new policy in future could be incredibly hard.

I'm the kind of guy to err on the side of caution and whilst feeling positive the risk of relapse is real. So am thinking keeping the policy in force is best. Would you suggest I put a call in to my insurer to discuss?

Thanks again

beam_me_up787

Just to add I'm expecting to take voluntary severance with my current employer in the Spring/Summer of next year

Sandtree

beam_me_up787 said:
Would you suggest I put a call in to my insurer to discuss?

The insurers are non-advisory, they can only give you facts about the policy and not recommend what you do. If you wanted to discuss your best options etc then you'd need to speak to an advisory broker or IFA

Weighty1

beam_me_up787 said:

Thank you for the speedy replies. All very good questions, some I don't know the answers too!.

I've been in remission from a type of blood cancer for 18 months and, whilst I wouldn't be earning an income during the degree I would be planning to go into full time employment in Sept 2025. I know income protection at 75% of my current salary would kick in if I were to relapse (that's already been confirmed with Aviva). The starting salary on completion of the degree is a fair few £K's lower than what I'm on now albeit with potential to move up quickly. I can see how getting a new policy in future could be incredibly hard.

I'm the kind of guy to err on the side of caution and whilst feeling positive the risk of relapse is real. So am thinking keeping the policy in force is best. Would you suggest I put a call in to my insurer to discuss?

Thanks again

As above, the insurer cannot advise you what to do and we are not supposed to advise on here about your personal circumstances, however, you are correct.  It could be incredibly hard to arrange new cover in the future and even if you were able to it would almost certainly have a full cancer exclusion. 

As a professional adviser if I was in your situation I would be keeping the policy going come hell or high water.  Obviously, that's not to say that doing that is right for you, it's just what I would do.